Customers to Get $57M in Health Insurance Rebates

BOSTON — Massachusetts health insurance plans will have to cough up almost $57 million in rebates to customers, state officials announced on June 26.

The rebates will be delivered to some 50,000 small businesses and another 50,000 residents who buy their insurance on the individual market. On average, individuals will receive just over $200 and businesses will receive $936.

Barbara Anthony, undersecretary of consumer affairs, said the rebates will come from health plans that spent too much on administrative costs instead of medical care.

"The Legislature said in 2010 that insurance companies had to spend 88 cents of every premium dollar on our health care. And what happened is there were some carriers — I think there were four of them — that missed the mark, and they spent less than 88 cents on the dollar for health care costs,” she said. State law requires the insurer to reimburse the difference.

The rebates show the law is working to bring down the costs of health care for consumers, Anthony said: "$57 million, by the end of this week, will be distributed to small businesses and working individuals who at the beginning of the week did not have that money. This is all good."

Insurers said they failed to meet the benchmarks because people visited doctors less than expected in 2011 because of the slow economy.